The legally required car insurance in India

At a minimum, the law requires a Third-Party car insurance plan. In practice, most owners need a Comprehensive car insurance plan with the Insured Declared Value (IDV) set to the car’s market value, plus a few optional covers chosen for the car’s age and where it is driven. A Personal Accident cover of up to ₹15 lakhs for the owner-driver is compulsory.

Third-Party car insurance is mandatory because a single crash can cause unlimited financial harm to someone else, and the law guarantees that victims are compensated even when the at-fault driver cannot pay. But unlike comprehensive insurance, Third-Party cover does not have a fixed Insured Declared Value (IDV) or an upper limit on the insurer’s liability for third-party injury or death claims. The Motor Vehicles Act, 1988 made it compulsory, and claims for injury or death are decided by Motor Accident Claims Tribunals.

Penalties for driving without insurance

Driving without at least a valid Third-Party plan is an offence under the Motor Vehicles Act. The penalties are:

• A fine of ₹2,000 for a first offence
• ₹4,000 for a repeat offence, with possible imprisonment
• Personal liability for the full cost of any injury or damage you cause, which can run far higher than any premium

Electric cars use the same three plans, priced a little differently. See the electric car insurance section for how EV pricing and cover work.

A Comprehensive or Own Damage plan can be extended with optional covers such as Zero Depreciation, Engine Secure, and Return to Invoice, and with standard endorsements for things like a CNG kit. See all optional covers.

Our take: if your car is newer than about 7 years or worth protecting, choose Comprehensive. Own Damage works only if you already hold a valid Third-Party plan. Third-Party alone is the bare legal minimum.

Why choose Kiwi car insurance?

Electric car insurance explained

What is different about insuring an EV?

• Third-Party premium is set by motor power in kilowatts (kW), not engine cc
• EVs often pay a little less than a petrol car of similar value, thanks to a government discount on the own-damage premium
• The own-damage premium is still based on the car's IDV

The battery is usually the costliest part of an EV, so a Comprehensive car insurance plan is the most useful starting point. EV cover for the battery, the charging cable or wall charger, and water damage in flood-prone cities is not always included by default. You can add these through optional covers, explained in full on the optional covers page.

What is IDV (Insured Declared Value) in car insurance?

IDV (Insured Declared Value) is the most your insurer will pay if your car is stolen or damaged to an extent that it is considered a total loss. It is set close to your car's current market value, and it falls as the car ages.

A higher IDV gives you a bigger payout if the worst happens, but it also raises your premium a little. Set it close to your car's real market value, so you are neither overpaying nor underprotected.

How IDV drops with car age

Unlike some countries, Indian car insurance does not price on traffic violations or a points system. What matters is your claims history, captured through your No Claim Bonus: claim-free years lower your premium, and claims raise it. So your record matters through claims, not challans.

The own-damage premium is set by zone. Zone A covers the 8 largest metros - Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, New Delhi, and Pune - and carries slightly higher rates. The rest of India falls in Zone B, which is a little cheaper, owing to lower traffic density and claim costs.

How car insurance prices are decided

A car insurance premium has two parts. The Third-Party part is fixed by IRDAI and is the same across every insurer. The Own Damage part is set by the insurer, based mainly on your car's IDV, with the rest depending on your city, car age, engine size, and the covers you choose.

As a rough guide, the own-damage base premium works out to about 3% to 3.7% of your car's IDV before any discount, with metro cities at the higher end. Your No Claim Bonus and other discounts then bring the final figure down.

In plain terms: Comprehensive premium = Own Damage minus (No Claim Bonus + discounts) + Third-Party.

Note - An 18% GST applies on top of these rates. New cars are issued a 3-year Third-Party plan at purchase. Electric cars are priced on battery power instead, shown in the EV section. Rates are subject to revision by IRDAI.

These are indicative ranges for a Comprehensive car insurance plan before your No Claim Bonus and discounts. Your actual price depends on the car's IDV, your city, its age, and the covers you choose.

How to make the most of your car insurance?

Getting the best value from your car insurance comes down to two things - picking the right plan and the other decisions you make related to your car insurance. Ways to lower your premium

• Keep your No Claim Bonus by skipping small repairs you can pay for yourself
• Choose a higher voluntary deductible to bring the premium down
• Fit an ARAI-approved anti-theft device for a 2.5% discount on the own-damage premium, up to ₹500
• Set the IDV accurately, rather than too high
• Compare plans before you buy, and renew on time so you do not lose your No Claim Bonus

Endorsements that plug specific gaps

Beyond the well-known optional covers, there are standard endorsements, often called IMT endorsements, that add or modify cover for a small premium. Common ones extend cover to a fitted CNG or LPG kit, or to electrical and electronic accessories like a music system that a standard plan would not fully cover. They are a low-cost way to plug specific gaps.

What to buy, by car age

• Up to 5 years - Comprehensive with Zero Depreciation, plus Return to Invoice on a near-new car
• 5 to 10 years - Keep Comprehensive, though Zero Depreciation matters less as the IDV falls
• Past 10 years - Weigh the own-damage premium against the low IDV; some owners move to Third-Party plus a basic Own Damage plan

This is an illustrative example. Your actual amounts depend on your car, the damage, and your car insurance plan.

Most Comprehensive policies do not cap the number of claims in a year. However, some optional covers such as Zero Depreciation, may limit how many times you can use that specific cover, so it is worth checking the wordings.

Each claim usually resets your No Claim Bonus at renewal, which removes a discount worth up to 50%. Frequent claims can also raise your renewal premium. For small repairs, it can be cheaper to pay yourself and protect the bonus.

Your No Claim Bonus keeps building for up to five claim-free years, where it reaches its maximum of 50%. It then stays at 50% for as long as you do not claim. The bonus belongs to you, not the car, so you can carry it over when you switch insurers or buy a new car.

With Kiwi Super NCB, you can earn up to 40% extra NCB for being claim-free

A standard No Claim Bonus caps at 50%. Super NCB rewards every claim-free year on a higher scale, climbing to 90% by your 6th year. Same safe driving, a much bigger discount on the own-damage part of your renewal premium.

What it is really worth: after 6 claim-free years on a ₹12,000 own-damage premium, a standard 50% NCB brings it down to ₹6,000. On Super NCB’s 90%, the same premium drops to ₹1,200, a saving of ₹4,800 in that year alone, for the same claim-free record.

To buy, you need your car's registration certificate (RC), your previous policy details if you have one, and KYC such as PAN or Aadhaar. Vehicle inspection is needed if there's an uninsured period between the expiry of your previous policy and the start of the current policy. For a brand-new car, the make, model, and variant are enough to start, since the registration number may not be issued yet. A new car is issued a 3-year Third-Party plan at purchase, usually with a 1-year Own Damage plan.

At renewal you usually just confirm your car number and details; you do not need to submit documents again if your cover has been continuous. The exception is a coverage gap. If your plan has already expired, the insurer may ask for a quick self-inspection through the app, or a brief physical inspection, before cover restarts, so it is best to renew before the expiry date.

On renewal, most owners take a 1-year plan, though longer Own Damage terms can be available. Buying for a longer term locks your price and avoids the risk of forgetting to renew.

After you buy your car insurance

Your cover usually starts straight away. When you buy online without a gap in cover, your policy is active from the start date on the document, which is usually issued within minutes of payment. The policy itself states the exact date and time from which you are covered.

For a standard renewal with no gap, there is no manual approval; the policy is issued straight away. Approval steps appear only in specific cases, such as renewing after a lapse or insuring an older car, where a quick self-inspection or photos of the car may be needed before cover starts.

What your policy document includes

You receive your policy document, the contract between you and the insurer. It includes:

• Your car and its IDV
• The covers and optional covers you hold
• The period of cover
• Your No Claim Bonus
• The premium paid
• The exclusions

Reading the policy schedule tells you exactly what you are and are not covered for.

Your policy is emailed to you as a PDF and saved in your account or app, so you can download it any time. A digital copy stored in DigiLocker or the mParivahan app is accepted by traffic authorities, so you do not need to carry a printout.

How a car insurance claim works

To make a claim, you report the incident to your insurer, who assesses the damage and settles the repair directly with a cashless partner garage. If you choose a non-network garage, you pay for the repairs first and are reimbursed after submitting the required documents. The difference between insurers is not the steps, it is how much of the work lands on you.

Every handover is a number you call, a story you repeat, and a queue you wait in. None of it is hard, but all of it is yours to manage, at the exact moment you would rather not.

With Kiwi, you don’t do any of this

You get one dedicated Claims Specialist who takes your claim from start to finish. They review the claim you submitted, brief the surveyor, coordinate with a cashless partner garage or guide you through a Pay First claim at a non-network garage, handle the paperwork, and keep you updated. The only thing you do is hand over the car and collect it.

Key things to know about your claim

A straightforward cashless claim is usually settled within a few working days, once the damage is assessed and the repair is approved. Reimbursement claims and those needing a survey or police report can take longer, depending on the documents and the extent of the damage.

A deductible is the part of each claim you pay yourself. There is a compulsory deductible set by the policy, ₹1,000 for cars up to 1500cc and ₹2,000 above 1500cc, plus any voluntary deductible you chose to lower your premium. Without Zero Depreciation, you also bear the depreciation on replaced parts.

Add Zero Depreciation to remove the depreciation cut, and Consumables cover for the small items a claim leaves out. Keep your voluntary deductible modest if you would rather pay less at claim time. For very small repairs, paying out of pocket can be cheaper once you account for your lost No Claim Bonus.

Once the repair is done and the claim is settled, your file is closed. The main after-effect is on your renewal: a claim usually resets your No Claim Bonus to zero. Kiwi Insurance Super NCB is the exception: it protects the discount, so a single claim does not wipe it out.